Chinese Consumers Get Back to Shopping for Gold

(Yicai Global) Feb. 28 — Consumer demand for gold in China, the world’s largest producer and consumer of the yellow metal, has been recovering since the lunar new year holiday, but has not yet reached the pre-pandemic level of 2019.

Gold buying has increased since the holiday, as in-store sales picked up after China relaxed its Covid-19 controls late last year. The wave of Covid-19 cases in the fourth quarter of 2022 led to a drop in footfall — people prefer to buy gold in physical stores — and a subsequent decline in sales.

“But the business hasn’t recovered to the pre-pandemic level yet,” Chen Shouping, who is in charge of Chow Tai Seng Jewellery’s gold products lineup, told Yicai Global. “We expect a gradual recovery between this year’s first and second quarter.”

Chow Tai Seng’s retail business grew about 20 percent in January from a year earlier, the Shenzhen-based firm said on Feb. 6. The holiday was a high point for gold jewelry, Chen noted, adding that gold buying will not be impacted much even if prices are at a historic high.

Business gradually improved around the time of the holiday, according to a salesperson at a well-known Chinese jewelry brand’s store in Shanghai’s Nanjing East Road shopping street. She also said her monthly salary was CNY20,000 (USD2,900) in January, the highest in the past year.

Gold jewelry is not only dazzling and sophisticated but also a way to store wealth, Chen said. The increasingly strong need to avoid the depreciation of cash has become a key reason for people to buy the yellow metal, he added.

Moreover, the age of Chinese gold and jewelry buyers has been falling in recent years. Most in-store buyers are aged 25 to 50, according to Chen. Those aged 35 to 50 spend the most, followed by 25- to 35-year-olds. Young consumers care more about an item’s visual appeal.

Editors: Shi Yi, Futura Costaglione